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Minimum Wage - Why it's Not a Livable Wage

Updated on October 31, 2016

Facts that dispel the "minimum wage" myth

The government causes the need for a higher "livable" wage
The government causes the need for a higher "livable" wage | Source

Experience has it's advantages when looking at a "livable" wage demand


I'm 64 yr. old retired dude. I've experienced more than one demand for a "livable" wage. The reasons are similar throughout the years. They all revolve around this statement: "It's not right that people get paid a wage that does not allow them a decent life or a "livable" wage."

I entered the work force at 16. The "livable" wage was $1.60 per hour. According to the government, a person could have a decent life with a "livable" wage of $1.60 per hour. This had risen from the original decent life or "livable" wage of .25 per hour when the minimum wage was first set in 1938.

Then I experienced wage and price controls during Nixon's presidency. Nixon outlawed any increase in income for a decent life. He also made it illegal for the market to move the "livable" wages higher. Are you surprised that the government actually attacked the basic concept of a "livable" wage?

He outlawed price increases. But, businesses worked around those laws, and prices did go up.(The markets always work) Hence, the "livable" wage was now an "unlivable" wage.

The other thing about me as follows: I use the "KISS" principle to help me understand. (KISS principle - keep it simple, stupid) Please don't get me wrong! I'm saying I'm a simpleton - I'm stupid! I need simple explanations to understand concepts. I'm odd that way.

There are two economic systems.

1) Capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

2) Socialism - a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be regulated by the community as a whole.

With the two economic systems explained, we can now understand the economic system in the U.S. From looking at the definitions, we can see that the U.S. is NOT a capitalistic system but a socialistic system. And a socialistic system is a "theory". Hence, a "livable" wage is a theory that has been postulated. (an assumption that a "livable" wage is attainable) The minimum wage was set in 1938 at .25 per hour, why has this become an "unlivable" wage?

There are two reasons:

1) The FED (The Federal Reserve Board) wants inflation. (This makes the "livable" wage of today the "unlivable" wage of tomorrow)

2) Government interference in the market place

Always a special interest


The FED's sole purpose is to help the banks that own the FED

2) The FED (The Federal Reserve Bank) always wants inflation.

The FED is a corporation the U.S. government entrusted the task of monetary policies. It's a company that's owned by the 8,000 U.S. banks. Banks like inflation. (Inflation leads to an increase in prices and assets) Since assets increase in value during inflation, banks benefit. (their collateral increase in value)

Inflation's not good for consumers. Inflation is the erosion of consumers purchasing power. Inflation increases revenue to the government with no extra taxes. Inflation protects the banks from losses. Assets used as collateral go up in price. This means the loans made are more secure.

Conversely, banks dislike deflation. Deflation causes prices and the value of assets to drop in value.

Deflation is good for consumers. Prices are declining, thus increasing consumer purchasing power. Deflation lowers the revenue of the government. Asset prices go down and tax revenue from purchases goes down. Deflation causes problems at the banks. The collateral used for loans are decreasing in value. This puts the banks loans at risk for default. The assets employed to back loans go below the loan amount, putting the bank at risk for defaults.

Thus, the financial crisis of 2007/08. Home prices cratered, leaving the bank's mortgage portfolios with huge losses. Deflation continued, resulting in the economic mess that we have now. Massive FED intervention in the markets to increase inflation, without any substantial benefit to consumers.

The FED, owned by the banks, wants inflation. It protects member banks. The government wants inflation because in increases tax revenue. Both entities are working to decrease the purchasing power of the "livable" wage.

Don't forget the definition of socialism - an economic theory. Theory is an assumption or an ideology. The exact opposite of "truth". The U.S. is a socialistic economy. Hence, the FED is theorizing that their procedures will work. There is not any "truth" in their actions.

90% of Subsidies Go to Top 10% Farmers - the Small Farms Get Very, Very Little

90% of farmers get 10% of farm subsidies. Only a select few benefit from subsidies
90% of farmers get 10% of farm subsidies. Only a select few benefit from subsidies

Government actions do not defend a "livable" wage

3) Government will not defend a "livable" wage. Government, as an entity, is for power, control and money.

Think about that statement for a minute. When was the last time that the government did anything to defend or increase your purchasing power? (Answer - 1971 - 1973. This was a major catastrophe!)

In 2015, there were over 3,500 new rules enacted by government agencies. Over 2,000 additional rules are pending. For every rule that's enacted, someone at a company has to keep track of those new rules. Costs rise as they comply with the new rules.

Maybe it's a rule about pollution. A person at a company has decipher if the rule applies to their business. If it does, they may have to change product design or install new equipment. These acts by the government trickle through all aspects of business in the U.S.

Conforming to government regulations is an added cost. It's paid for the business. Then that cost is added to the total cost of a product. The additional costs are eventually paid for by the consumer.

Here's a list of government policies and actions that do not defend a "livable" wage:

1) The "War" on terror.

2) The "War" on drugs

3) The Affordable Care Act (Classified as a tax by the Supreme Court)

4) Subsidizing Planned Parenthood

5) 50% of food products have price supports established by the U.S. government

6) Military installations throughout the world (At present 38 and rising)

All government actions take money out of your pocket. Thus, it affects the purchasing power of your wages. The more taken out, the less "livable" your wages.

I'll include a graph. It shows the loss of purchasing power in the U.S. dollar since the inception of the FED. This will show you the goal of the U.S. government and the FED.

I'll give you a hint - it's not to defend your "livable" wage.

Keep in mind that the U.S. economy is a socialist economy. The actions by the government are based on theory vs. truth.

Purchasing power of the U.S. dollar

Notice how the purchasing power of the U.S. dollar never, ever goes up!
Notice how the purchasing power of the U.S. dollar never, ever goes up! | Source

The best example of the government not defending citizens "livable" wage

Congress, the FED and the Treasury bailed out their "friends'. 99% of Americans suffered.
Congress, the FED and the Treasury bailed out their "friends'. 99% of Americans suffered. | Source

The best example of citizens supporting corruption.

"the Special Inspector General for TARP summary of the bailout says that the total commitment of government is $16.8 trillion dollars with the $4.6 trillion already paid out." Forbes article 7/14/2015.

Let's play around with some numbers.

The $4.6 trillion is $13,000 for every man, woman and child in the U.S.. $32,000 per average family (2.5 people is the avg. size of families in the U.S.)

At $16.8 trillion, it's $52,000 for every man, woman and child or $130,000 per average family.

(I know you're thinking, "Man, I could do some buying with that kind of money!!!" Let's not get ahead of ourselves)

965 banks, insurance companies and government entities received bailouts. (ProPblica) These companies and government entities were the "cream of the crop". They had the people with MBA's and PHD's that knew, really, really, knew, how to manage investments and money. They went bankrupt.

They got charged and fined for laundering money. In addition, charges of fraud, rigging markets, rigging interest rates and fines for SEC violations were levied agains the banks. The fines they paid totaled $1Trillion! Not one high ranking bank official went to jail. As the government doled out the taxpayers monies, the senior bank officials continued to receive millions in compensation.

Taxpayers, on the other hand, received nothing. They didn't get charged with fraud, nor fined for breaking laws. The excuse given by the government was, "It's your own fault." Consumers should have known the banks were misleading taxpayers with their elaborate mortgage schemes.

Comparative scenarios can be found throughout the history of American Government. When "Push Comes To Shove" , the government will always let the citizens of the country suffer.

If you want to keep score:

Government supporting corrupt enterprises + 965

Government supporting a "livable" income for taxpayers - 0 - zilch, nada, zippo!

Keep this in mind - American citizens suffered 9 million of foreclosures and and millions of bankruptcies. Not one executive, from any bailed out company, went to jail.

Conclusion - You can have a "livable" minimum wage of $50 per hour. The government's goal is to take as much they can. If citizens don't stop the corruption in government, no "livable" wage will last long. Settling for a "livable" wage now a settling for corruption or favoritism forever.


Submit a Comment
  • The Old Guard profile imageAUTHOR

    John Wilson 

    2 years ago from Whereever I hang my hat is my hone. Currently in Ibarra, Ecuador

    Dont Taze-

    Why should they be denied a living wage just because they don't work? Why are they entitled to a "living" wage? DUH? Because they exist?

    For the Congressman who think people should have a livable wage - let's cut their salary, since they produce nothing, and give it to people who also proceed nothing. Would that be more fair? Do the same with the President, all the Secretary's of every department, and all the employees at the IRS. Now that would be an interesting approach! Put your money where your mouth is!!

    How do you expect a man to support his family and not work? So, you expect me to support a guy and his wife that are so stupid to have kids when they can't afford to eat? I'd let them be - let the wolves do there thing. That's what wolves do - weed out the weak and sick. Maybe let them roam around D.C. for a year........

    Why do people have to work at all to get a living wage? You're right. Why should anybody work at all. Lets just print more fiat, have nobody growing food, delivering food nor have any stores selling any food. That makes total sense.

    That was fun! Any more questions?



  • Dont Taze Me Bro profile image

    Banned cause of PISSANTS Promisem and Dean Traylor 

    2 years ago

    I don't know about that, there are millions of people making a livable wage. It's up to you to get the skills, education, certifications, whatever is needed to make your employment worth a living wage, if you won't or don't want to for any reason that's your fault, not the government's or the taxpayer's fault. The reasoning that workers need a living wage so they don't have to ascend or improve them selves and their situations is akin to paying them a living wage to do nothing. After all, why should they be denied a living wage just because they don't work? How do you expect a man to support his family and not work? That's inhumane. Really where do you draw the line on the government legislating what you need to get a living wage? Why do people have to work at all to get a living wage?

  • The Old Guard profile imageAUTHOR

    John Wilson 

    2 years ago from Whereever I hang my hat is my hone. Currently in Ibarra, Ecuador

    Hi Terrielynn1

    When you have both the government and the Central Bank working against citizens, there will never be a livable wage.

    My brother just got done with a visit to the northeastern coast of Canada. First thing he talked about and what he talked about the most, were the high prices.

    When the government says, We want to help, it's time to head for the hills! Get away as fast as possible!


    You have a good day, eh!



  • Terrielynn1 profile image

    Terrie Lynn 

    2 years ago from Canada

    Iam Canadian. We are experiencing this now. The way it's going they will put small business and mom and pops stores out of business. Only big box and major entities will survive. My first job paid 2.50 an hour.

  • The Old Guard profile imageAUTHOR

    John Wilson 

    2 years ago from Whereever I hang my hat is my hone. Currently in Ibarra, Ecuador

    It is now, Dont Taze Me Bro!!

    Have a great week!



  • Dont Taze Me Bro profile image

    Banned cause of PISSANTS Promisem and Dean Traylor 

    2 years ago

    So true but hey john, you didn't approve my comment. It's not showing.

  • The Old Guard profile imageAUTHOR

    John Wilson 

    2 years ago from Whereever I hang my hat is my hone. Currently in Ibarra, Ecuador

    Hey, Dont Taze Me Bro,

    First off, thanks for taking the time to leave a comment, as we both know - very few people take the time to do that.

    And I somewhat agree with your statement, but one does have to try to at least spread a bit of truth. Whether it's accepted or not, I guess is beside the point . Facts is facts, feelings are feelings.

    If logic worked with the masses, we'd have a much better world.



  • Dont Taze Me Bro profile image

    Banned cause of PISSANTS Promisem and Dean Traylor 

    2 years ago

    LOL, facts that may shock liberals? In the liberal "world" there are no facts, truth is relative or haven't you heard.

    Of course although you will often hear liberals declare that truth (otherwise known as facts) is relative (when the facts prove them wrong) the statement itself is contradictory. DUH.

    If one says, “all truth is relative” one must admit that one is stating a relative truth, not an absolute truth. This means that there must be situations in which the statement is not true. So there must be situations in which some truth is absolute. This makes the statement self-contradictory.

    But I digress from the FACT that your hub page makes some very good points, so good that I predict some liberal is not going to resist the temptation to declare your facts are not facts, just watch.


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